Market Braces For Tablet Mania

When Apple ushered in the iPad era in April of last year, few experts envisioned the device would energize a once moribund market for tablet computers. In recent weeks, virtually every high-tech wannabe has unveiled plans for its own copycat machine. As a matter of fact, it would surprise no one if McDonald's offered a tablet with each Happy Meal.

The iPad's eye-popping sales figures have fueled a mad dash to capture the burgeoning market for touch-screen computers. In its most recent earnings report, the Cupertino, California-based firm announced it sold 14.79 million tablets in the last nine months, exceeding even the most optimistic forecasts. iPad sales in the final quarter were 7.33 million, signaling sales strength beyond so-called early adopter cosumer segment.

Market research firm IDC estimated that Apple accounted for nearly 90 percent of all tablets sold worldwide. What is more impressive is that Apple has invaded the corporate market, selling tablets to more than 80 percent of the Fortune 100 companies, according to Apple's chief financial officer.

In its latest forecast, Forrester Research predicted that tablet sales will more than double this year. By 2015, more than one-third of American consumers will own tablet computers, according to the tech industry research firm. No wonder tech firms are salivating.

Companies such as Toshiba, Motorola, Vizio and Samsung have rolled out their own tablet models geared to take advantage of consumer demand. Research in Motion (RIM) plans a 4G version this summer, forecasting sales of four million units. Those firms could be expected to follow Apple's lead, however, they aren't the only ones desperate to leap into the table wars.

Qualcomm, the San Diego based company that is a supplier of microchips, recently announced it had purchased Atheros Communications, Inc., which makes chips for tablets. More importantly, Atheros already has a business relationship with Apple, supplying chips for iPhones. Qualcomm spent $3.2 billion and never looked back.

As the competition heats up, it will be difficult for the firms chasing Apple to catch up. The company has such a huge lead in technology and market penetration that competitors will have to slash prices to make any dent in Apple's share. As the consumer market becomes saturated, expect the next battleground to be businesses.

Even as the competition scrambles to rush tablets to market, Apple is hatching plans for an updated version of its innovative iPad. The new model likely will debut in the summer.

With so many tablets flooding the market, not every firm can be successful. RIM and Samsung appear to be the best positioned among Apple's competitors. By next year, a number of companies will be retrenching because the demand cannot sustain the expected tide of tablet products.

However, there is no doubt of the winner in the tablet market. Apple has a clear lead and it is not likely to give up its position any time soon.